SL Green Realty Corp. | Maryland | 13-3956755 |
SL Green Operating Partnership, L.P. | Delaware | 13-3960938 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | o | |
Non-accelerated filer | o | (Do not check if a smaller reporting company) | ||
Smaller Reporting Company | o | Emerging Growth Company | o | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | o |
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer | x | (Do not check if a smaller reporting company) | ||
Smaller Reporting Company | o | Emerging Growth Company | o | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | o |
• | Combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | Combined reports eliminate duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the Company's disclosure applies to both the Company and the Operating Partnership; and |
• | Combined reports create time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | consolidated financial statements; |
• | the following notes to the consolidated financial statements: |
◦ | Note 11, Noncontrolling Interests on the Company’s Consolidated Financial Statements; |
◦ | Note 12, Stockholders' Equity of the Company; |
◦ | Note 13, Partners' Capital of the Operating Partnership. |
PART I. FINANCIAL INFORMATION | ||
Item 1. | FINANCIAL STATEMENTS | |
FINANCIAL STATEMENTS OF SL GREEN REALTY CORP. | ||
Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017 | ||
Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited) | ||
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017 (unaudited) | ||
Consolidated Statement of Equity for the six months ended June 30, 2018 (unaudited) | ||
Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited) | ||
FINANCIAL STATEMENTS OF SL GREEN OPERATING PARTNERSHIP, L.P. | ||
Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017 | ||
Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited) | ||
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017 (unaudited) | ||
Consolidated Statement of Capital for the six months ended June 30, 2018 (unaudited) | ||
Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited) | ||
Notes to Consolidated Financial Statements (unaudited) | ||
Management's Discussion and Analysis of Financial Condition and Results of Operations | ||
Quantitative and Qualitative Disclosures about Market Risk | ||
Controls and Procedures (SL Green Realty Corp. and SL Green Operating Partnership, L.P.) | ||
PART II. | OTHER INFORMATION | |
Legal Proceedings | ||
Risk Factors | ||
Unregistered Sales of Equity Securities and Use of Proceeds | ||
Defaults Upon Senior Securities | ||
Mine Safety Disclosures | ||
Other Information | ||
Exhibits | ||
Signatures |
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Commercial real estate properties, at cost: | |||||||
Land and land interests | $ | 1,893,047 | $ | 2,357,051 | |||
Building and improvements | 5,225,431 | 6,351,012 | |||||
Building leasehold and improvements | 1,423,994 | 1,450,614 | |||||
Properties under capital lease | 47,445 | 47,445 | |||||
8,589,917 | 10,206,122 | ||||||
Less: accumulated depreciation | (1,994,696 | ) | (2,300,116 | ) | |||
6,595,221 | 7,906,006 | ||||||
Assets held for sale | 593,995 | 338,354 | |||||
Cash and cash equivalents | 287,240 | 127,888 | |||||
Restricted cash | 92,740 | 122,138 | |||||
Investments in marketable securities | 28,570 | 28,579 | |||||
Tenant and other receivables, net of allowance of $16,558 and $18,637 in 2018 and 2017, respectively | 47,482 | 57,644 | |||||
Related party receivables | 27,854 | 23,039 | |||||
Deferred rents receivable, net of allowance of $15,776 and $17,207 in 2018 and 2017, respectively | 322,656 | 365,337 | |||||
Debt and preferred equity investments, net of discounts and deferred origination fees of $23,216 and $25,507 in 2018 and 2017, respectively | 2,168,515 | 2,114,041 | |||||
Investments in unconsolidated joint ventures | 3,059,985 | 2,362,989 | |||||
Deferred costs, net | 198,941 | 226,201 | |||||
Other assets | 290,729 | 310,688 | |||||
Total assets (1) | $ | 13,713,928 | $ | 13,982,904 | |||
Liabilities | |||||||
Mortgages and other loans payable, net | $ | 2,517,097 | $ | 2,837,282 | |||
Revolving credit facility, net | 351,272 | 30,336 | |||||
Unsecured term loan, net | 1,492,320 | 1,491,575 | |||||
Unsecured notes, net | 1,396,722 | 1,395,939 | |||||
Accrued interest payable | 26,104 | 38,142 | |||||
Other liabilities | 108,151 | 188,005 | |||||
Accounts payable and accrued expenses | 140,739 | 137,142 | |||||
Deferred revenue | 95,756 | 208,119 | |||||
Capital lease obligations | 43,221 | 42,843 | |||||
Deferred land leases payable | 3,567 | 3,239 | |||||
Dividend and distributions payable | 79,518 | 85,138 | |||||
Security deposits | 63,872 | 67,927 | |||||
Liabilities related to assets held for sale | 265,538 | 4,074 | |||||
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities | 100,000 | 100,000 | |||||
Total liabilities (1) | 6,683,877 | 6,629,761 |
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Commitments and contingencies | — | — | |||||
Noncontrolling interests in Operating Partnership | 486,610 | 461,954 | |||||
Preferred units | 301,385 | 301,735 | |||||
Equity | |||||||
SL Green stockholders' equity: | |||||||
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both June 30, 2018 and December 31, 2017 | 221,932 | 221,932 | |||||
Common stock, $0.01 par value, 160,000 shares authorized and 86,780 and 93,858 issued and outstanding at June 30, 2018 and December 31, 2017, respectively (including 1,055 shares held in treasury at June 30, 2018 and December 31, 2017) | 868 | 939 | |||||
Additional paid-in-capital | 4,601,608 | 4,968,338 | |||||
Treasury stock at cost | (124,049 | ) | (124,049 | ) | |||
Accumulated other comprehensive income | 32,622 | 18,604 | |||||
Retained earnings | 1,457,835 | 1,139,329 | |||||
Total SL Green stockholders' equity | 6,190,816 | 6,225,093 | |||||
Noncontrolling interests in other partnerships | 51,240 | 364,361 | |||||
Total equity | 6,242,056 | 6,589,454 | |||||
Total liabilities and equity | $ | 13,713,928 | $ | 13,982,904 | |||
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $175.0 million and $398.0 million of land, $0.3 billion and $1.4 billion of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $47.4 million and $47.4 million of properties under capital lease, $32.2 million and $330.9 million of accumulated depreciation, $860.2 million and $221.0 million of other assets included in other line items, $136.2 million and $628.9 million of real estate debt, net, $0.4 million and $2.5 million of accrued interest payable, $43.2 million and $42.8 million of capital lease obligations, and $155.6 million and $56.8 million of other liabilities included in other line items as of June 30, 2018 and December 31, 2017, respectively. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | ||||||||||||||||
Rental revenue, net | $ | 211,369 | $ | 279,407 | $ | 426,738 | $ | 560,736 | ||||||||
Escalation and reimbursement | 27,052 | 42,620 | 53,451 | 86,812 | ||||||||||||
Investment income | 49,273 | 60,622 | 94,563 | 100,921 | ||||||||||||
Other income | 13,422 | 15,501 | 28,059 | 27,062 | ||||||||||||
Total revenues | 301,116 | 398,150 | 602,811 | 775,531 | ||||||||||||
Expenses | ||||||||||||||||
Operating expenses, including related party expenses of $4,665 and $8,499 in 2018 and $5,262 and $9,436 in 2017, respectively. | 56,237 | 70,852 | 116,019 | 145,358 | ||||||||||||
Real estate taxes | 45,322 | 60,945 | 90,983 | 122,013 | ||||||||||||
Ground rent | 8,846 | 8,308 | 17,154 | 16,616 | ||||||||||||
Interest expense, net of interest income | 53,611 | 64,856 | 101,527 | 130,478 | ||||||||||||
Amortization of deferred financing costs | 3,546 | 3,432 | 7,083 | 8,193 | ||||||||||||
Depreciation and amortization | 67,914 | 133,054 | 137,302 | 227,188 | ||||||||||||
Transaction related costs | 348 | 46 | 510 | 179 | ||||||||||||
Marketing, general and administrative | 22,479 | 24,256 | 46,007 | 48,399 | ||||||||||||
Total expenses | 258,303 | 365,749 | 516,585 | 698,424 | ||||||||||||
Net income before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, (loss) gain on sale of real estate net, depreciable real estate reserves, and gain on sale of marketable securities | 42,813 | 32,401 | 86,226 | 77,107 | ||||||||||||
Equity in net income from unconsolidated joint ventures | 4,702 | 3,412 | 8,738 | 10,026 | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 72,025 | 13,089 | 65,585 | 15,136 | ||||||||||||
Purchase price and other fair value adjustments | 11,149 | — | 60,442 | — | ||||||||||||
(Loss) gain on sale of real estate, net | (14,790 | ) | (3,823 | ) | 8,731 | (3,256 | ) | |||||||||
Depreciable real estate reserves | — | (29,064 | ) | — | (85,336 | ) | ||||||||||
Gain on sale of investment in marketable securities | — | — | — | 3,262 | ||||||||||||
Net income | 115,899 | 16,015 | 229,722 | 16,939 | ||||||||||||
Net (income) loss attributable to noncontrolling interests: | ||||||||||||||||
Noncontrolling interests in the Operating Partnership | (5,586 | ) | (419 | ) | (10,858 | ) | (895 | ) | ||||||||
Noncontrolling interests in other partnerships | (173 | ) | (786 | ) | (371 | ) | 16,705 | |||||||||
Preferred units distributions | (2,847 | ) | (2,851 | ) | (5,696 | ) | (5,701 | ) | ||||||||
Net income attributable to SL Green | 107,293 | 11,959 | 212,797 | 27,048 | ||||||||||||
Perpetual preferred stock dividends | (3,737 | ) | (3,737 | ) | (7,475 | ) | (7,475 | ) | ||||||||
Net income attributable to SL Green common stockholders | $ | 103,556 | $ | 8,222 | $ | 205,322 | $ | 19,573 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Amounts attributable to SL Green common stockholders: | ||||||||||||||||
Income before depreciable real estate reserves and gains on sale and fair value adjustments | $ | 38,674 | $ | 27,156 | $ | 77,333 | $ | 89,818 | ||||||||
Purchase price and other fair value adjustments | 10,578 | — | 57,406 | — | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 68,336 | 12,517 | 62,291 | 14,474 | ||||||||||||
(Loss) gain on sale of real estate, net | (14,032 | ) | (3,656 | ) | 8,292 | (3,114 | ) | |||||||||
Depreciable real estate reserves | — | (27,795 | ) | — | (81,605 | ) | ||||||||||
Net income attributable to SL Green common stockholders | $ | 103,556 | $ | 8,222 | $ | 205,322 | $ | 19,573 | ||||||||
Basic earnings per share: | ||||||||||||||||
Income before depreciable real estate reserves and gains on sale and fair value adjustments | $ | 0.44 | $ | 0.27 | $ | 0.87 | $ | 0.90 | ||||||||
Purchase price and other fair value adjustments | 0.12 | — | 0.65 | — | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 0.79 | 0.13 | 0.70 | 0.14 | ||||||||||||
(Loss) gain on sale of real estate, net | (0.16 | ) | (0.04 | ) | 0.09 | (0.03 | ) | |||||||||
Depreciable real estate reserves | — | (0.28 | ) | — | (0.81 | ) | ||||||||||
Net income attributable to SL Green common stockholders | $ | 1.19 | $ | 0.08 | $ | 2.31 | $ | 0.20 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Income before depreciable real estate reserves and gains on sale and fair value adjustments | $ | 0.44 | $ | 0.27 | $ | 0.87 | $ | 0.89 | ||||||||
Purchase price and other fair value adjustments | 0.12 | — | 0.65 | — | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 0.79 | 0.12 | 0.70 | 0.14 | ||||||||||||
(Loss) gain on sale of real estate, net | (0.16 | ) | (0.04 | ) | 0.09 | (0.03 | ) | |||||||||
Depreciable real estate reserves | — | (0.27 | ) | — | (0.81 | ) | ||||||||||
Net income attributable to SL Green common stockholders | $ | 1.19 | $ | 0.08 | $ | 2.31 | $ | 0.19 | ||||||||
Dividends per share | $ | 0.8125 | $ | 0.775 | $ | 1.625 | $ | 1.55 | ||||||||
Basic weighted average common shares outstanding | 87,176 | 99,900 | 88,772 | 100,268 | ||||||||||||
Diluted weighted average common shares and common share equivalents outstanding | 92,083 | 104,732 | 93,667 | 105,140 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 115,899 | $ | 16,015 | $ | 229,722 | $ | 16,939 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Change in net unrealized gain (loss) on derivative instruments, including SL Green's share of joint venture net unrealized gain (loss) on derivative instruments | 3,977 | (2,520 | ) | 14,890 | (3,595 | ) | ||||||||||
Change in unrealized gain (loss) on marketable securities | 318 | 263 | (8 | ) | (4,487 | ) | ||||||||||
Other comprehensive income (loss) | 4,295 | (2,257 | ) | 14,882 | (8,082 | ) | ||||||||||
Comprehensive income | 120,194 | 13,758 | 244,604 | 8,857 | ||||||||||||
Net (income) loss attributable to noncontrolling interests and preferred units distributions | (8,606 | ) | (4,056 | ) | (16,925 | ) | 10,109 | |||||||||
Other comprehensive (loss) income attributable to noncontrolling interests | (245 | ) | 100 | (864 | ) | 299 | ||||||||||
Comprehensive income attributable to SL Green | $ | 111,343 | $ | 9,802 | $ | 226,815 | $ | 19,265 |
SL Green Realty Corp. Stockholders | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Series I Preferred Stock | Shares | Par Value | Additional Paid- In-Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Noncontrolling Interests | Total | |||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | 221,932 | 92,803 | $ | 939 | $ | 4,968,338 | $ | (124,049 | ) | $ | 18,604 | $ | 1,139,329 | $ | 364,361 | $ | 6,589,454 | |||||||||||||||||
Cumulative adjustment upon adoption of ASC 610-20 | 570,524 | 570,524 | |||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | $ | 221,932 | 92,803 | $ | 939 | $ | 4,968,338 | $ | (124,049 | ) | $ | 18,604 | $ | 1,709,853 | $ | 364,361 | $ | 7,159,978 | |||||||||||||||||
Net income | 212,797 | 371 | 213,168 | ||||||||||||||||||||||||||||||||
Other comprehensive income | 14,018 | 14,018 | |||||||||||||||||||||||||||||||||
Preferred dividends | (7,475 | ) | (7,475 | ) | |||||||||||||||||||||||||||||||
DRSPP proceeds | 1 | 64 | 64 | ||||||||||||||||||||||||||||||||
Conversion of units in the Operating Partnership for common stock | 15 | 1,560 | 1,560 | ||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest in the Operating Partnership | (4,493 | ) | (4,493 | ) | |||||||||||||||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | (20 | ) | 8,090 | 8,090 | |||||||||||||||||||||||||||||||
Repurchases of common stock | (7,133 | ) | (72 | ) | (382,080 | ) | (310,939 | ) | (693,091 | ) | |||||||||||||||||||||||||
Proceeds from stock options exercised | 59 | 1 | 5,636 | 5,637 | |||||||||||||||||||||||||||||||
Contributions to consolidated joint venture interests | 1,828 | 1,828 | |||||||||||||||||||||||||||||||||
Deconsolidation of partially owned entity | (314,596 | ) | (314,596 | ) | |||||||||||||||||||||||||||||||
Cash distributions to noncontrolling interests | (724 | ) | (724 | ) | |||||||||||||||||||||||||||||||
Cash distributions declared ($1.625 per common share, none of which represented a return of capital for federal income tax purposes) | (141,908 | ) | (141,908 | ) | |||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | 221,932 | 85,725 | $ | 868 | $ | 4,601,608 | $ | (124,049 | ) | $ | 32,622 | $ | 1,457,835 | $ | 51,240 | $ | 6,242,056 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating Activities | |||||||
Net income | $ | 229,722 | $ | 16,939 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 144,385 | 235,381 | |||||
Equity in net income from unconsolidated joint ventures | (8,738 | ) | (10,026 | ) | |||
Distributions of cumulative earnings from unconsolidated joint ventures | 9,889 | 12,388 | |||||
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate | (65,585 | ) | (15,136 | ) | |||
Purchase price and other fair value adjustments | (60,442 | ) | — | ||||
Depreciable real estate reserves | — | 85,336 | |||||
(Gain) loss on sale of real estate, net | (8,731 | ) | 3,256 | ||||
Gain on sale of investments in marketable securities | — | (3,262 | ) | ||||
Deferred rents receivable | (4,369 | ) | (23,237 | ) | |||
Other non-cash adjustments | 9,404 | 20,352 | |||||
Changes in operating assets and liabilities: | |||||||
Tenant and other receivables | (397 | ) | 1,447 | ||||
Related party receivables | (1,116 | ) | (7,869 | ) | |||
Deferred lease costs | (17,469 | ) | (23,560 | ) | |||
Other assets | (4,329 | ) | 680 | ||||
Accounts payable, accrued expenses, other liabilities and security deposits | 22,867 | (11,310 | ) | ||||
Deferred revenue and land leases payable | 1,121 | 29,471 | |||||
Net cash provided by operating activities | 246,212 | 310,850 | |||||
Investing Activities | |||||||
Acquisitions of real estate property | (9,733 | ) | (19 | ) | |||
Additions to land, buildings and improvements | (96,577 | ) | (165,262 | ) | |||
Acquisition deposits and deferred purchase price | (1,520 | ) | — | ||||
Investments in unconsolidated joint ventures | (254,305 | ) | (93,182 | ) | |||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | 178,892 | 93,688 | |||||
Net proceeds from disposition of real estate/joint venture interest | 760,335 | 61,248 | |||||
Proceeds from sale or redemption of marketable securities | — | 54,363 | |||||
Other investments | (22,790 | ) | 3,014 | ||||
Origination of debt and preferred equity investments | (603,575 | ) | (854,577 | ) | |||
Repayments or redemption of debt and preferred equity investments | 317,337 | 663,140 | |||||
Net cash provided by (used in) investing activities | 268,064 | (237,587 | ) |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Financing Activities | |||||||
Proceeds from mortgages and other loans payable | $ | 210,575 | $ | 779,642 | |||
Repayments of mortgages and other loans payable | (22,864 | ) | (693,243 | ) | |||
Proceeds from revolving credit facility and senior unsecured notes | 1,475,000 | 1,072,800 | |||||
Repayments of revolving credit facility and senior unsecured notes | (1,155,000 | ) | (875,697 | ) | |||
Proceeds from stock options exercised and DRIP issuance | 5,701 | 11,706 | |||||
Repurchase of common stock | (724,696 | ) | (211,599 | ) | |||
Redemption of preferred stock | (350 | ) | (125 | ) | |||
Distributions to noncontrolling interests in other partnerships | (724 | ) | (609 | ) | |||
Contributions from noncontrolling interests in other partnerships | 1,828 | 33,009 | |||||
Distributions to noncontrolling interests in the Operating Partnership | (7,712 | ) | (7,112 | ) | |||
Dividends paid on common and preferred stock | (160,699 | ) | (168,678 | ) | |||
Other obligations related to loan participations | (3 | ) | 10,000 | ||||
Tax withholdings related to restricted share awards | (3,842 | ) | (3,879 | ) | |||
Deferred loan costs and capitalized lease obligation | (1,536 | ) | (8,521 | ) | |||
Net cash used in financing activities | (384,322 | ) | (62,306 | ) | |||
Net increase in cash, cash equivalents, and restricted cash | 129,954 | 10,957 | |||||
Cash, cash equivalents, and restricted cash at beginning of year | 250,026 | 369,967 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 379,980 | $ | 380,924 | |||
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||||||
Conversion of units in the Operating Partnership for common stock | 1,560 | 13,242 | |||||
Tenant improvements and capital expenditures payable | 16,534 | 7,210 | |||||
Fair value adjustment to noncontrolling interest in Operating Partnership | 4,493 | 12,712 | |||||
Deconsolidation of subsidiaries | 298,403 | 328,644 | |||||
Transfer of assets related to assets held for sale | 593,995 | 173,918 | |||||
Transfer of liabilities related to assets held for sale | 265,538 | 149 | |||||
Removal of fully depreciated commercial real estate properties | 110,594 | 5,754 | |||||
Share repurchase payable | 31,605 | 41,598 | |||||
Bond repurchase payable | — | 65,416 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash and cash equivalents | $ | 287,240 | $ | 270,965 | |||
Restricted cash | 92,740 | 109,959 | |||||
Total cash, cash equivalents, and restricted cash | $ | 379,980 | $ | 380,924 |
June 30, 2018 | December 31, 2017 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Commercial real estate properties, at cost: | ||||||||
Land and land interests | $ | 1,893,047 | $ | 2,357,051 | ||||
Building and improvements | 5,225,431 | 6,351,012 | ||||||
Building leasehold and improvements | 1,423,994 | 1,450,614 | ||||||
Properties under capital lease | 47,445 | 47,445 | ||||||
8,589,917 | 10,206,122 | |||||||
Less: accumulated depreciation | (1,994,696 | ) | (2,300,116 | ) | ||||
6,595,221 | 7,906,006 | |||||||
Assets held for sale | 593,995 | 338,354 | ||||||
Cash and cash equivalents | 287,240 | 127,888 | ||||||
Restricted cash | 92,740 | 122,138 | ||||||
Investments in marketable securities | 28,570 | 28,579 | ||||||
Tenant and other receivables, net of allowance of $16,558 and $18,637 in 2018 and 2017, respectively | 47,482 | 57,644 | ||||||
Related party receivables | 27,854 | 23,039 | ||||||
Deferred rents receivable, net of allowance of $15,776 and $17,207 in 2018 and 2017, respectively | 322,656 | 365,337 | ||||||
Debt and preferred equity investments, net of discounts and deferred origination fees of $23,216 and $25,507 in 2018 and 2017, respectively | 2,168,515 | 2,114,041 | ||||||
Investments in unconsolidated joint ventures | 3,059,985 | 2,362,989 | ||||||
Deferred costs, net | 198,941 | 226,201 | ||||||
Other assets | 290,729 | 310,688 | ||||||
Total assets (1) | $ | 13,713,928 | $ | 13,982,904 | ||||
Liabilities | ||||||||
Mortgages and other loans payable, net | $ | 2,517,097 | $ | 2,837,282 | ||||
Revolving credit facility, net | 351,272 | 30,336 | ||||||
Unsecured term loan, net | 1,492,320 | 1,491,575 | ||||||
Unsecured notes, net | 1,396,722 | 1,395,939 | ||||||
Accrued interest payable | 26,104 | 38,142 | ||||||
Other liabilities | 108,151 | 188,005 | ||||||
Accounts payable and accrued expenses | 140,739 | 137,142 | ||||||
Deferred revenue | 95,756 | 208,119 | ||||||
Capital lease obligations | 43,221 | 42,843 | ||||||
Deferred land leases payable | 3,567 | 3,239 | ||||||
Dividend and distributions payable | 79,518 | 85,138 | ||||||
Security deposits | 63,872 | 67,927 | ||||||
Liabilities related to assets held for sale | 265,538 | 4,074 | ||||||
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities | 100,000 | 100,000 | ||||||
Total liabilities (1) | 6,683,877 | 6,629,761 | ||||||
Commitments and contingencies | — | — | ||||||
Limited partner interests in SLGOP (4,700 and 4,453 limited partner common units outstanding at June 30, 2018 and December 31, 2017, respectively) | 486,610 | 461,954 | ||||||
Preferred units | 301,385 | 301,735 |
June 30, 2018 | December 31, 2017 | |||||||
(unaudited) | ||||||||
Capital | ||||||||
SLGOP partners' capital: | ||||||||
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both June 30, 2018 and December 31, 2017 | 221,932 | 221,932 | ||||||
SL Green partners' capital (904 and 973 general partner common units and 84,821 and 91,831 limited partner common units outstanding at June 30, 2018 and December 31, 2017, respectively) | 5,936,262 | 5,984,557 | ||||||
Accumulated other comprehensive income | 32,622 | 18,604 | ||||||
Total SLGOP partners' capital | 6,190,816 | 6,225,093 | ||||||
Noncontrolling interests in other partnerships | 51,240 | 364,361 | ||||||
Total capital | 6,242,056 | 6,589,454 | ||||||
Total liabilities and capital | $ | 13,713,928 | $ | 13,982,904 | ||||
(1) The Operating Partnership's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $175.0 million and $398.0 million of land, $0.3 billion and $1.4 billion of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $47.4 million and $47.4 million of properties under capital lease, $32.2 million and $330.9 million of accumulated depreciation, $860.2 million and $221.0 million of other assets included in other line items, $136.2 million and $628.9 million of real estate debt, net, $0.4 million and $2.5 million of accrued interest payable, $43.2 million and $42.8 million of capital lease obligations, and $155.6 million and $56.8 million of other liabilities included in other line items as of June 30, 2018 and December 31, 2017, respectively. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | ||||||||||||||||
Rental revenue, net | $ | 211,369 | $ | 279,407 | $ | 426,738 | $ | 560,736 | ||||||||
Escalation and reimbursement | 27,052 | 42,620 | 53,451 | 86,812 | ||||||||||||
Investment income | 49,273 | 60,622 | 94,563 | 100,921 | ||||||||||||
Other income | 13,422 | 15,501 | 28,059 | 27,062 | ||||||||||||
Total revenues | 301,116 | 398,150 | 602,811 | 775,531 | ||||||||||||
Expenses | ||||||||||||||||
Operating expenses, including related party expenses of $4,665 and $8,499 in 2018 and $5,262 and $9,436 in 2017, respectively. | 56,237 | 70,852 | 116,019 | 145,358 | ||||||||||||
Real estate taxes | 45,322 | 60,945 | 90,983 | 122,013 | ||||||||||||
Ground rent | 8,846 | 8,308 | 17,154 | 16,616 | ||||||||||||
Interest expense, net of interest income | 53,611 | 64,856 | 101,527 | 130,478 | ||||||||||||
Amortization of deferred financing costs | 3,546 | 3,432 | 7,083 | 8,193 | ||||||||||||
Depreciation and amortization | 67,914 | 133,054 | 137,302 | 227,188 | ||||||||||||
Transaction related costs | 348 | 46 | 510 | 179 | ||||||||||||
Marketing, general and administrative | 22,479 | 24,256 | 46,007 | 48,399 | ||||||||||||
Total expenses | 258,303 | 365,749 | 516,585 | 698,424 | ||||||||||||
Net income before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, (loss) gain on sale of real estate net, depreciable real estate reserves, and gain on sale of marketable securities | 42,813 | 32,401 | 86,226 | 77,107 | ||||||||||||
Equity in net income from unconsolidated joint ventures | 4,702 | 3,412 | 8,738 | 10,026 | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 72,025 | 13,089 | 65,585 | 15,136 | ||||||||||||
Purchase price and other fair value adjustments | 11,149 | — | 60,442 | — | ||||||||||||
(Loss) gain on sale of real estate, net | (14,790 | ) | (3,823 | ) | 8,731 | (3,256 | ) | |||||||||
Depreciable real estate reserves | — | (29,064 | ) | — | (85,336 | ) | ||||||||||
Gain on sale of investment in marketable securities | — | — | — | 3,262 | ||||||||||||
Net income | 115,899 | 16,015 | 229,722 | 16,939 | ||||||||||||
Net (income) loss attributable to noncontrolling interests: | ||||||||||||||||
Noncontrolling interests in other partnerships | (173 | ) | (786 | ) | (371 | ) | 16,705 | |||||||||
Preferred units distributions | (2,847 | ) | (2,851 | ) | (5,696 | ) | (5,701 | ) | ||||||||
Net income attributable to SLGOP | 112,879 | 12,378 | 223,655 | 27,943 | ||||||||||||
Perpetual preferred unit distributions | (3,737 | ) | (3,737 | ) | (7,475 | ) | (7,475 | ) | ||||||||
Net income attributable to SLGOP common unitholders | $ | 109,142 | $ | 8,641 | $ | 216,180 | $ | 20,468 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Amounts attributable to SLGOP common unitholders: | ||||||||||||||||
Income before depreciable real estate reserves and gains on sale and fair value adjustments | $ | 40,758 | $ | 28,439 | $ | 81,422 | $ | 93,924 | ||||||||
Purchase price and other fair value adjustments | 11,149 | — | 60,442 | — | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 72,025 | 13,089 | 65,585 | 15,136 | ||||||||||||
(Loss) gain on sale of real estate, net | (14,790 | ) | (3,823 | ) | 8,731 | (3,256 | ) | |||||||||
Depreciable real estate reserves | — | (29,064 | ) | — | (85,336 | ) | ||||||||||
Net income attributable to SLGOP common unitholders | $ | 109,142 | $ | 8,641 | $ | 216,180 | $ | 20,468 | ||||||||
Basic earnings per unit: | ||||||||||||||||
Income before depreciable real estate reserves and gains on sale and fair value adjustments | $ | 0.44 | $ | 0.27 | $ | 0.87 | $ | 0.90 | ||||||||
Purchase price and other fair value adjustments | 0.12 | — | 0.65 | — | ||||||||||||
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate | 0.79 | 0.13 | 0.70 | 0.14 | ||||||||||||
(Loss) gain on sale of real estate, net | (0.16 | ) | (0.04 | ) | 0.09 | (0.03 | ) | |||||||||
Depreciable real estate reserves | — | (0.28 | ) | — | (0.81 | ) | ||||||||||
Net income attributable to SLGOP common unitholders | $ | 1.19 | $ | 0.08 | $ | 2.31 | $ | 0.20 | ||||||||
Diluted earnings per unit: | ||||||||||||||||
Income before depreciable real estate reserves and gains on sale and fair value adjustments | $ | 0.44 | $ | 0.27 | $ | 0.87 | $ | 0.89 | ||||||||
Purchase price and other fair value adjustments | 0.12 | — | 0.65 | — | ||||||||||||
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate | 0.79 | 0.12 | 0.70 | 0.14 | ||||||||||||
(Loss) gain on sale of real estate, net | (0.16 | ) | (0.04 | ) | 0.09 | (0.03 | ) | |||||||||
Depreciable real estate reserves | — | (0.27 | ) | — | (0.81 | ) | ||||||||||
Net income attributable to SLGOP common unitholders | $ | 1.19 | $ | 0.08 | $ | 2.31 | $ | 0.19 | ||||||||
Dividends per unit | $ | 0.8125 | $ | 0.775 | $ | 1.625 | $ | 1.55 | ||||||||
Basic weighted average common units outstanding | 91,882 | 104,462 | 93,467 | 104,852 | ||||||||||||
Diluted weighted average common units and common unit equivalents outstanding | 92,083 | 104,732 | 93,667 | 105,140 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 115,899 | $ | 16,015 | $ | 229,722 | $ | 16,939 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Change in net unrealized gain on derivative instruments, including SLGOP's share of joint venture net unrealized gain on derivative instruments | 3,977 | (2,520 | ) | 14,890 | (3,595 | ) | ||||||||||
Change in unrealized gain (loss) on marketable securities | 318 | 263 | (8 | ) | (4,487 | ) | ||||||||||
Other comprehensive income (loss) | 4,295 | (2,257 | ) | 14,882 | (8,082 | ) | ||||||||||
Comprehensive income | 120,194 | 13,758 | 244,604 | 8,857 | ||||||||||||
Net (loss) income attributable to noncontrolling interests | (173 | ) | (786 | ) | (371 | ) | 16,705 | |||||||||
Other comprehensive (loss) income attributable to noncontrolling interests | (245 | ) | 100 | (864 | ) | 299 | ||||||||||
Comprehensive income attributable to SLGOP | $ | 119,776 | $ | 13,072 | $ | 243,369 | $ | 25,861 |
SL Green Operating Partnership Unitholders | |||||||||||||||||||||||
Partners' Interest | |||||||||||||||||||||||
Series I Preferred Units | Common Units | Common Unitholders | Accumulated Other Comprehensive Income | Noncontrolling Interests | Total | ||||||||||||||||||
Balance at December 31, 2017 | $ | 221,932 | 92,803 | $ | 5,984,557 | $ | 18,604 | $ | 364,361 | $ | 6,589,454 | ||||||||||||
Cumulative adjustment upon adoption of ASC 610-20 | 570,524 | 570,524 | |||||||||||||||||||||
Balance at January 1, 2018 | $ | 221,932 | 92,803 | $ | 6,555,081 | $ | 18,604 | $ | 364,361 | $ | 7,159,978 | ||||||||||||
Net income | 212,797 | 371 | 213,168 | ||||||||||||||||||||
Other comprehensive income | 14,018 | 14,018 | |||||||||||||||||||||
Preferred distributions | (7,475 | ) | (7,475 | ) | |||||||||||||||||||
DRSPP proceeds | 1 | 64 | 64 | ||||||||||||||||||||
Conversion of common units | 15 | 1,560 | 1,560 | ||||||||||||||||||||
Reallocation of noncontrolling interests in the operating partnership | (4,493 | ) | (4,493 | ) | |||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | (20 | ) | 8,090 | 8,090 | |||||||||||||||||||
Repurchases of common stock | (7,133 | ) | (693,091 | ) | (693,091 | ) | |||||||||||||||||
Contribution to consolidated joint venture interests | 1,828 | 1,828 | |||||||||||||||||||||
Deconsolidation of partially owned entity | (314,596 | ) | (314,596 | ) | |||||||||||||||||||
Contributions - proceeds from stock options exercised | 59 | 5,637 | 5,637 | ||||||||||||||||||||
Cash distributions to noncontrolling interests | (724 | ) | (724 | ) | |||||||||||||||||||
Cash distributions declared ($1.625 per common unit, none of which represented a return of capital for federal income tax purposes) | (141,908 | ) | (141,908 | ) | |||||||||||||||||||
Balance at June 30, 2018 | $ | 221,932 | 85,725 | $ | 5,936,262 | $ | 32,622 | $ | 51,240 | $ | 6,242,056 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating Activities | |||||||
Net income | $ | 229,722 | $ | 16,939 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 144,385 | 235,381 | |||||
Equity in net income from unconsolidated joint ventures | (8,738 | ) | (10,026 | ) | |||
Distributions of cumulative earnings from unconsolidated joint ventures | 9,889 | 12,388 | |||||
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate | (65,585 | ) | (15,136 | ) | |||
Purchase price and other fair value adjustments | (60,442 | ) | — | ||||
Depreciable real estate reserves | — | 85,336 | |||||
(Gain) loss on sale of real estate, net | (8,731 | ) | 3,256 | ||||
Gain on sale of investments in marketable securities | — | (3,262 | ) | ||||
Deferred rents receivable | (4,369 | ) | (23,237 | ) | |||
Other non-cash adjustments | 9,404 | 20,352 | |||||
Changes in operating assets and liabilities: | |||||||
Tenant and other receivables | (397 | ) | 1,447 | ||||
Related party receivables | (1,116 | ) | (7,869 | ) | |||
Deferred lease costs | (17,469 | ) | (23,560 | ) | |||
Other assets | (4,329 | ) | 680 | ||||
Accounts payable, accrued expenses, other liabilities and security deposits | 22,867 | (11,310 | ) | ||||
Deferred revenue and land leases payable | 1,121 | 29,471 | |||||
Net cash provided by operating activities | 246,212 | 310,850 | |||||
Investing Activities | |||||||
Acquisitions of real estate property | (9,733 | ) | (19 | ) | |||
Additions to land, buildings and improvements | (96,577 | ) | (165,262 | ) | |||
Acquisition deposits and deferred purchase price | (1,520 | ) | — | ||||
Investments in unconsolidated joint ventures | (254,305 | ) | (93,182 | ) | |||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | 178,892 | 93,688 | |||||
Net proceeds from disposition of real estate/joint venture interest | 760,335 | 61,248 | |||||
Proceeds from sale or redemption of marketable securities | — | 54,363 | |||||
Other investments | (22,790 | ) | 3,014 | ||||
Origination of debt and preferred equity investments | (603,575 | ) | (854,577 | ) | |||
Repayments or redemption of debt and preferred equity investments | 317,337 | 663,140 | |||||
Net cash provided by (used in) investing activities | 268,064 | (237,587 | ) | ||||
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Financing Activities | |||||||
Proceeds from mortgages and other loans payable | $ | 210,575 | $ | 779,642 | |||
Repayments of mortgages and other loans payable | (22,864 | ) | (693,243 | ) | |||
Proceeds from revolving credit facility and senior unsecured notes | 1,475,000 | 1,072,800 | |||||
Repayments of revolving credit facility and senior unsecured notes | (1,155,000 | ) | (875,697 | ) | |||
Proceeds from stock options exercised and DRIP issuance | 5,701 | 11,706 | |||||
Repurchase of common stock | (724,696 | ) | (211,599 | ) | |||
Redemption of preferred stock | (350 | ) | (125 | ) | |||
Distributions to noncontrolling interests in other partnerships | (724 | ) | (609 | ) | |||
Contributions from noncontrolling interests in other partnerships | 1,828 | 33,009 | |||||
Distributions paid on common and preferred units | (168,411 | ) | (175,790 | ) | |||
Other obligations related to loan participations | (3 | ) | 10,000 | ||||
Tax withholdings related to restricted share awards | (3,842 | ) | (3,879 | ) | |||
Deferred loan costs and capitalized lease obligation | (1,536 | ) | (8,521 | ) | |||
Net cash used in financing activities | (384,322 | ) | (62,306 | ) | |||
Net increase in cash, cash equivalents, and restricted cash | 129,954 | 10,957 | |||||
Cash, cash equivalents, and restricted cash at beginning of year | 250,026 | 369,967 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 379,980 | $ | 380,924 | |||
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||||||
Conversion of units in the Operating Partnership for common stock | 1,560 | 13,242 | |||||
Tenant improvements and capital expenditures payable | 16,534 | 7,210 | |||||
Fair value adjustment to noncontrolling interest in Operating Partnership | 4,493 | 12,712 | |||||
Deconsolidation of subsidiaries | 298,403 | 328,644 | |||||
Transfer of assets related to assets held for sale | 593,995 | 173,918 | |||||
Transfer of liabilities related to assets held for sale | 265,538 | 149 | |||||
Removal of fully depreciated commercial real estate properties | 110,594 | 5,754 |